60% of Counties To Receive Less in Title I Grants

Title I grants for more than 60 percent of the nation's counties
will shrink next school year because of a federal decision last week to
allocate the program's $7.1 billion using new child-poverty counts.

About 2,000 of the nation's 3,150 counties will lose a portion
of their grants intended to help low-income communities after two
federal departments opted to base Title I funding on an average of
poverty data from the 1990 U.S. Census and an analysis of 1994
population estimates.

While more than half of the counties in the loss column will see a
drop in remedial education aid of less than 5 percent, about 75 will
see a 20 percent decrease in their allocations, according to an
analysis of preliminary county-by-county allocations released last week
by the Department of Education.

Among the 1,150 or so winners, 177 counties will gain more than 20
percent.

In general, schools in California, the Southwest, and the Northeast
will see increases while their counterparts in the Southeast and the
Midwest should brace for losses.

The dramatic money shift for counties is in contrast to
state-by-state allocations. Only 14 states and Puerto Rico will lose
Title I money, with none dipping by more than 6 percent, according to
final state grants the department released last week. (See the
accompanying chart.)

Winners Win Big

Poverty shifts within states are behind the drastic funding changes
for counties.

In Virginia, for example, the city of Richmond will probably lose 7
percent of its current $244,500 grant, but suburban Henrico County in
the city's suburbs can probably count on a 24 percent increase from its
$1.5 million.

That pattern appears to be playing out throughout the country: Of
those who win, many win big. But of those who lose, most lose just a
little.

Despite the disruption the changes may cause, Education Department
officials say their decision to combine the 1990 data with the 1994
estimates is the fairest way to distribute money for the 1997-98 school
year.

"Our interest has always been in getting money where the poor kids
are," said Mary Jean LeTendre, the department's Title I director.
Averaging the 1990 count and the more recent estimates is the best way
to do that, she said.

In a 1994 law, Congress required the Education Department, along
with the Department of Commerce, to evaluate the Bureau of the Census'
1994 child-poverty estimates and calculate 1997-98 Title I grants based
on them, unless estimates were " inappropriate or unreliable."

A panel of statisticians formed by the National Academy of Sciences
recommended that the departments average the 1994 estimates with
comparable data from the 1990 Census. ("Chapter 1 Aid Failed To Close Learning
Gap," April 2, 1997.)

The departments followed that advice after extensive analysis of the
report, Ms. LeTendre said.

Political Fallout

But while the federal government has science on its side, it doesn't
have politics.

Iowa--the state that stands to lose the most--is the home of Sen.
Tom Harkin, the senior Democrat on the panel that sets the Education
Department's annual funding. Twenty-seven of the state's 100 counties
will feel a 15 percent drop, a total of $1.2 million.

Five Iowa counties will gain support, ranging from 1 percent to 12
percent of their current grants.

"Senator Harkin is extremely unhappy about the Title I situation,"
Patrick Dorton, the senator's press secretary, said last week. "He's
considering a variety of options" to protect Iowa from losses, Mr.
Dorton said.

But Mr. Harkin does not have much time to act. The Education
Department is planning to start distributing Title I money to states
July 1.

Officials there do not want to wait any longer to inform counties of
their grants because most school officials are already planning for the
next school year and need to know how much federal money they will
receive.

Timing "was one of our driving forces to make the decision when we
did," Ms. LeTendre said.

While the Education Department has calculated its final allocations
for state grants, the county grants may change slightly by the time
money starts flowing this summer. Any changes, however, will be
minor.

Hold-Harmless Boost

In calculating county-by-county estimated Title I grants, the
department found that almost 1,200 of the nation's counties would land
at the so-called hold-harmless level for the basic-grant formula.

That formula distributes 86 percent of the program's $7.1 billion
and goes to almost every county in the country.

The hold-harmless provision protects counties from losing more than
5 percent, 10 percent, or 15 percent of their previous year's
grants--depending on their poverty levels.

Those levels have shifted so dramatically that droves of counties
dipped below the hold-harmless amount when the department first
calculated basic-grant amounts. Because Congress appropriated only a 2
percent increase for the basic grants, other counties started to slip
to their minimum levels once the department started replenishing the
big losers from the initial calculations.

Many counties had their money "skimmed off to support the
hold-harmless grants in other places," said Paul S. Brown, the chief of
the Title I office's policy branch.

By contrast, the so-called concentration-grant formula--for
districts with large numbers of poor children--does not include a
hold-harmless provision. Any county whose child-poverty rate slipped
below 15 percent or whose population of impoverished children dropped
under 6,500 lost all of its concentration-grant money.

That's why about 120 counties can expect to be hit with more than a
15 percent loss.

But some projected losers may recover some of their money before
school begins in the fall.

Under the 1994 law, states may set aside 2 percent of their
concentration-grant money and give it to needy districts whose counties
don't qualify for that money. Congress added that flexibility to aid
districts with child-poverty rates of 15 percent whose counties'
poverty rates are not high enough to qualify for money from the
concentration pool.

If states choose to exercise their rights to redirect
concentration-grant money, many of the biggest losers may make up some
of their lost money, but probably will not get enough to put them in
the black.

Other counties could recover funds if their counts of neglected and
delinquent children--which are not included in the department's numbers
but will be added to the poverty figures before states distribute the
money--bump their Title I populations to the point at which they
requalify for concentration-grant money.

But the number of districts that benefit from that scenario will be
very small, Mr. Brown said.

The NAS panel, meanwhile, is continuing to evaluate the 1994
estimates. If it decides the updated figures are reliable and accurate,
it may propose that 1998-99 grants be based on the 1994 numbers alone,
Ms. LeTendre said.

If the Education Department uses 1994 data next year, counties could
expect another round of dramatic shifts.

By using the combined data, 120 counties were suddenly ineligible
for concentration grants in 1997-98. If federal officials had used the
1994 estimates alone, 250 counties would have lost concentration-grant
funding, Mr. Brown said.